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Energy Security. Global Issues Seminar Series November 8 th 2006. Energy Security is…?. For rich countries…maintaining life styles, and continued growth For poor countries…growth and development For the poorest .. access to wood, electricity,… For producers …market access.
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Energy Security Global Issues Seminar Series November 8th 2006
Energy Security is…? • For rich countries…maintaining life styles, and continued growth • For poor countries…growth and development • For the poorest .. access to wood, electricity,… • For producers…market access
Most simply… Reliable energy supply at reasonable cost and acceptable environmental impacts…. … that will allow the world to grow in a sustainable and equitable way
Why concerns about energy security now? • High oil prices & processing constraints • Perception that future oil supply may be insufficient: • High and growing concentration in the Middle East OPEC countries • Strong growth from a booming China • Emerging India • Robust demand from the industrialized countries with easy substitution away from oil over • No easy successor to oil waiting in the wings
Potential for future demand growth(Source IEA) Developing Country Population: 6.4 billion Developed Country Population: 1.0 billion
IEA Global Demand by RegionBusiness-as-usual scenario Non-OECD demand grows three times faster than OECD demand
What are the alternatives • Heavy oil/tar sands: potential but climate change impacts • Coal: super competitive (fastest growth in 2005) but climate change and local pollution • Gas: prices linked to oil and concentrated • Efficiency: lots of potential in developed countries but how to make it happen • Renewables: becoming more competitive but costs and other constraints (e.g. bio fuels, dams, wind)
18 000 16 000 14 000 Natural gas 12 000 10 000 Mtoe Oil 8 000 6 000 Hydro Coal 4 000 power 2 000 Other renewables Nuclear power 0 1970 1980 1990 2000 2010 2020 2030 IEA Global Demand by FuelBusiness-as-usual scenario In Reference Case, global energy demand will rise by 52% by 2030
IEA Increases in Energy Demand 2003 - 2030 83% of additional demand to be met from fossil fuels
How important for WBG’s developing countries? • Short Term • Short term macro adjustment by oil consumers • “Windfalls” management by producers • Long term • Higher costs, if not avoided, are a significant “tax” on oil using poor countries • Volatility – impact on growth? • Implications for changing fuel cost competitiveness (& climate concerns) on: • Energy strategies and long term energy Investment choices • Other aspects of development
What Can be done to secure energy supplies • Everything is important – no silver bullet • Greater efficiency, conservation and renewable energy • Fossil fuels with environmental mitigation • Energy independence is a mirage • Interdependence is the only way • Open trade and investment • Cooperation • Use of markets and private sector to greatest extent
Final Question? A new era in terms of the world’s use of resources Versus: Market forces and ingenuity will sort it out